Citigroup eyes Turkish bank: WSJ

LONDON (MarketWatch) -- Citigroup is expected to submit a cash bid to acquire some or all of Finansbank, Turkey's eighth-largest bank by assets, in a transaction that could be valued at $5 billion or more, according to a media report Tuesday.

The banks are expected to submit their bids Tuesday, The Journal reported, and the winner could be known within a week. The banks and their boards were putting the final touches on their submissions Monday night, The Journal said.

Finansbank shares were stable at 7.15 Turkish lira in Istanbul morning trading. National Bank of Greece slipped 0.7% in Athens.

"We don't know anything about the structure of the bids yet. We expect them to come in the range of $5.1 to $5.7 billion," said Mete Yuksel, a bank analyst for EFG Istanbul Securities.

Finansbank's head of investor relations declined to comment.

Citigroup, with a market value of about $241 billion, far outweighs NBG, which is Greece's oldest bank, with a market value of $15 billion, The Journal said.

But NBG views Finansbank as a key strategic asset, so it may be willing to drive up the price at the auction, The Journal said.

Finansbank, founded in 1987, began as a corporate bank but has moved increasingly into retail and bulked up its credit-card business. Finansbank's branch network now stands at more than 200 branches. The bank also has built smaller networks of three dozen branches apiece in Russia and Romania, two markets that have attracted increasing interest from Western banks.

Citigroup and NBG could bid for all of Finansbank, which would include the Russian and Romanian units, or just its Turkish operations, the Journal reported. Finansbank's net income in 2005 rose 68% to $359.1 million from $214.2 million in 2004, the Journal said.

Citigroup joins a growing list of global banks interested in Turkey.

London's HSBC Holdings Plc
HBC, -2.10%
is active there and General Electric Co.
GE, -0.80%
last year purchased a 25.5% stake in Garanti Bank.

For Citigroup, it would mark its first significant bank acquisition since it paid $2.7 billion for KorAm Bank, a commercial bank in South Korea, in April 2004. It also would be the biggest deal since Charles Prince became chief executive in late 2003, succeeding Sanford I. Weill.

Weill built Citigroup into the world's largest financial-services institution through a series of acquisitions in the 1990s.

But since Prince, Weill's longtime right-hand man, became CEO, he has concentrated on moving the bank beyond a series of embarrassments and scandals that prompted the Federal Reserve in March 2005 to caution Citigroup against pursuing any major expansions until its regulatory house was in order, The Journal said.

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